Confiscating Russian assets: US suggests £40bn in interest aid for Ukraine

U.S. Deputy National Security Advisor Daleep Singh said Tuesday that the G7 can still provide Ukraine with £40 billion in interest from frozen assets. He also announced that the U.S. and its partners are ready to take steps affecting trade between Russia and China.

Thanks to the U.S. Congress, it is now possible to confiscate frozen state assets and transfer their equivalent to Ukraine. This would be the most effective and vital option for all of us in the G7. But the confiscation of capital is a 'red line' for many of our partners in the G7, Singh said during his speech at the Brookings Institution think tank in Washington, D.C.

In this way, he responded to a question regarding further actions on using approximately £245 billion worth of Russian assets frozen by the West to support Ukraine.

Though Congress has given the U.S. administration the authority to confiscate assets frozen by the U.S., only approximately 1% of them are under American jurisdiction, while the vast majority is under the authority of G7 countries and the EU.

The European Union has agreed to use approximately £2.5 billion annually in interest generated by these funds. Still, the U.S. wants to use £40 billion from future interest now and transfer it to Ukraine. According to Singh, the upcoming G7 summit in Apulia, Italy, in June will be the best opportunity to fill Ukraine's financial gap before the U.S. elections in November.

The U.S. Deputy National Security Advisor admitted that such a solution carries some risks, but the greatest risk would be leaving Ukraine underfunded in its fight for freedom.

Singh emphasized that "it is the financial support it provides, and the signal that it sends to Putin we are not going to fatigue and he is not going to outlast us, regardless of what happens in the remainder of the year."

In his speech, mainly dedicated to the sanctions imposed on Russia, Singh assessed that the sanctions are causing Russia deep and long-term damage. Still, they cannot influence Vladimir Putin's behaviour, which he believes is guided by the logic of 18th-century rulers such as Peter the Great and Catherine the Great. Economic issues are secondary to him.

The White House representative also announced that the U.S. and its partners are ready to adopt a range of additional sanctions and export control measures and to expand secondary sanctions to hit China's material support for the Russian war machine. When asked about the possibility of imposing a total embargo or tariffs on all Russian goods, Singh admitted that embargoes have not always been effective. Still, considering the entire Russian economy's alignment with war objectives, ultimately, that may be the final effect.